Defendant: Pharmasan Labs, Inc. and NeuroScience, Inc.
Settlement Amount: $8.5 Million
Whistleblower Reward: $1.13 Million
Allegations: Health Care Fraud (Improper Billing)
“If this type of fraud is going to be stopped or even slowed down, it’ll require whistleblowers with courage like Mr. Forrest to come forward and report concerns of wrongdoing to the government.” – Baum Hedlund Whistleblower Attorney Mark Schlein
Pharmasan Labs, NeuroScience and two executives paid $8.5 million to settle a whistleblower lawsuit that claimed both companies improperly billed Medicare for laboratory tests not eligible for reimbursement, as well as tests that were submitted by non-approved, non-physician practitioners. Whistleblower Richard Forrest, who once worked as a billing manager at Pharmasan, received a reward of $1.13 million.
Pharmasan is a clinical laboratory providing endocrinology, immunology and neurology testing. NeuroScience provides assessments of laboratory tests, and sells nutritional supplements and “take home” laboratory tests on Pharmasan’s behalf.
According to the qui tam lawsuit, Pharmasan billed the government for thousands of tests that failed to meet federal reimbursement guidelines because they were medically unnecessary, experimental, and/or investigative. The qui tam lawsuit further alleged that, in some circumstances, non-authorized providers “prescribed” the take home tests. In order to avoid government rejection of these tests for payment, Pharmasan allegedly altered billing codes and/or misrepresented other information to government health care agencies.